Navigant Research Blog

The Digital Transformation of Buildings: Creating Business Value, Not Just Data

Casey Talon — November 2, 2016

The ubiquity of unstructured and real-time data streams has the potential to revolutionize business. Consumers expect technology to make their homes more comfortable, their schedules more productive, and their travel more efficient. The unyielding pressure to be connected is beginning to transform expectations for how commercial buildings are operated. The challenge is now to align occupant and business expectations with real estate and facilities management realities.

Navigant Research has been tracking the development of the intelligent building industry and specific innovation through the convergence of IT with commercial building equipment and controls. Energy efficiency has been the bedrock of market development because the improvements in operations translate into reductions on utility bills—a transparent monetization of return on investment. The energy story is a critical starting point, but it is only part of the promise of intelligent building technologies. As the market continues to mature, a more comprehensive story is unfolding around the business value of digital transformation in commercial buildings.

IoT for Bigger Impact and Better Decisions

The Internet of the Things (IoT) characterizes an important shift in positioning technology for improving commercial building operations. The fundamental idea is that IoT is a platform approach to data creation, communications, aggregation, and analysis. It’s about creating data-rich environments for a more comprehensive view of what is happening inside the walls of a commercial facility to make better decisions. The ability to translate the data into information that resonates across business units and stakeholder points of view is what’s really impactful about IoT in commercial buildings. In other words, one IoT intelligent building solution can address big business pain points—energy efficiency for the head of sustainability, predictive maintenance for the head of engineering—while also generating enterprisewide key performance indicators (KPIs) for the C-suite.

There is a big-picture opportunity here. When IoT-enabled intelligent buildings are a reality, the benefits are wide-reaching. As explained in a recent Huffington Post article, “It is through a change in mindset, enabled by the Internet of Things, that buildings become smart. If we get buildings right, we get the energy system right. … Smart buildings reduce the cost of the energy transition—both upfront, as smart buildings allow fewer investments in new power capacity, and on an ongoing basis due to less energy consumption and integration of renewables such as surplus energy from other parts of the city.” Navigant Research agrees. In fact, we have been outlining the importance of buildings in our ongoing research into the energy industry transformation, or as we frame it, the development of the Energy Cloud. In our most recent Energy Cloud white paper, we discuss this very idea as Building2Grid. Watch for more on this big-picture idea for the intelligent building in the coming months.

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